Federal Debt Ceiling Observations
May 11, 2023
Hanging their hats on false equivalence
The underlying logic Speaker Kevin McCarthy and his crew lean on in their arguments relative to the federal debt ceiling rely on false equivalencies.
The gist of their message seems to be, “Just as families and businesses balance their checkbooks every month, we believe the federal government needs to make balancing the nation’s checkbook a top priority. Raising the debt ceiling is a short-term solution to a long- term problem. Before we consider raising the debt ceiling, our federal government needs to focus on reducing spending and living within its means to ensure a healthy economy for future generations”.
Sounds pretty good, right?
Yet, that explanation illuminates one of the greatest obstacles we face as a nation: A void of economic and financial understanding among most American adults.
The ‘checkbook’ is the equivalent of an annual budget. Current revenues flow in, and current expenses flow out. If revenues exceed expenses, there is a surplus. When revenues exactly equal expenses, it is ‘break even’. When expenses exceed revenues, there is a current-year deficit.
Staying with the household theme, the federal debt is most equivalent to a home mortgage, and the balance due is an accumulation of debt over time. Remember that new roof? That new kitchen? That fabulous backyard pool? Those were capital expenses, incurred in one year, but with an expected useful life of 10, 15, even 30 years. You add these expenses to the mortgage so that they get paid off over time.
As a retired professional in the field of finance and economics, when I hear Speaker McCarthy or members of his crew attempting to equate current spending to our overall aggregate debt obligations, I cringe.
Some rather simple adjustments to our tax code, including elimination of the carried interest loophole and raising the top corporate rate from 21% to 28% would make huge revenue contributions to balancing the annual (current FY) federal budget.
And, why is it that low- and moderate-income wage earners are required to make contributions to Social Security on every dollar of their earnings up to the current wage cap [a.k.a. ‘the contribution and benefit base’] of $160,200, yet those who are blessed to earn in excess of that amount are exempt from contributions to Social Security on earnings above that amount?
The wage cap on Medicare contributions was eliminated in the 1990’s, so even higher-income wage earners are required to make the 1.45% contribution to the Medicare tax with no limit on earnings.
We clearly have a revenue gap. Why does the cap on social security earnings continue to this day? And, those who claim their income not as ‘wages’ but as ‘carried interest’ not only receive beneficial income tax treatment, they also are exempt from FICA contributions. What a racket!
Federally guaranteed obligations are debt securities issued by the U.S. government, currently considered risk-free because they are backed by the full faith and credit of the federal government. When the Treasury sells these securities, they help to finance the federal debt outstanding at that time.
Allowing the government to default as an outcome from a false debate linking current revenues and spending to our long-term debt obligations would be a preventable tragedy of immense proportions.
Minority Leader Hakeem Jeffries (if you are listening): I implore you to be bold and to tear apart Speaker McCarthy’s logic map, and to take this opportunity to focus in on one of the greatest obstacles we face as a nation: A void of economic and financial understanding among most American adults. Until the American people awake from their deprivation of economic and financial principles, they will continue to be vulnerable to Alternative Facts such as those presented by Speaker McCarthy and his crew.
The Big Lebowski must have learned of McCarthy’s foolish and destructive crusade to equate and combine the federal debt ceiling with the current (2024) federal budget when he so eloquently said, “This will not stand, you know. This aggression will not stand, man”.
A Potential Travesty of Justice
May 9, 2023
Come on, folks! Let’s show some compassion!
Here’s a guy who grew up in the ‘50’s and ‘60’s, mostly schooled in rigorous and rigid ‘Military Schools’ where he developed a serious case of bone spurs.
Fast forward to the ‘90’s: He’s all stressed out from the pressures of expanding his business into Manhattan, when he’s walking through Bergdorf Goodman, an elite department store on Fifth Avenue. He mistakes an attractive woman who is lightly flirting with him as his wife and follows her into a dressing room for some ‘afternoon delight’. Maybe he didn’t have his glasses on? Maybe he just needed to get his rocks off?
When asked for his opinion on this travesty of justice, Rep. George Santos (R, NY) said, “Let’s be kind and compassionate: this guy has never before told a lie, right? And he’s never ever admitted to – or been accused of – any sort of sexual battery or impropriety. Even when he was in Moscow for the Miss Universe pageant in 2013, reports show he behaved properly and never did anything that was out of line according to Russian laws and regulations.”
Rep. Matt Gaetz (R, FL) said, “This extraordinary person has led a selfless and exemplary life. He is a great leader yet he has been subject to continued political attacks by nefarious forces. This will not stand, you know. This aggression will not stand, man”.
Responsible, rational and reliable character witnesses have spoken…
State of the Union 2023
February 8, 2023
Joe Biden & State of the Union
February 7, 2023 was the date when Joe Biden, our current POTUS, Number 46, stood at the podium in the U.S. Capitol to report on the State of the Union.
An executive summary of his remarks: “Because the soul of this nation is strong, because the backbone of this nation is strong, because the people of this nation are strong, the State of the Union is strong.”
It reminded me a bit of something I recall from an American History course many years ago, a speech by an elected official in the mid-19th century where it was said, “United We Stand, Divided We Fall”. A quick look back on that concept brought me to ancient Greece, and then to the Bible (Mark 3:25) as “And if a house be divided against itself, that house cannot stand.“
The Seal of the Commonwealth of Kentucky includes the phrase “United We Stand, Divided We Fall.”
There were plenty of elected officials seated in the U.S. Capitol to observe Mr. Biden’s State of the Union address. Most were dressed well; on good behavior; and showing respect for the congressional rules of decorum. A few of the elected officials seated in the Capitol were unable to control their emotions, and some of those exhibited bad – Really Bad — behavior.
Sad. Very Sad…
One takeaway from this major event is that Mr. Biden didn’t: (1) vote for or against the Tax Cuts and Jobs Act of 2017 (possibly the worst legislation of the 21st century to date); (2) dissolve the White House Pandemic Response Team; (3) say, “The CDC and my Administration are doing a GREAT job of handling Coronavirus!”; (4) set the stage for a mass genocide of the American people; (5) bring the entire US economy to its knees; (6) create tariffs on thousands of products which resulted in the imposition of some $80 Billion of the equivalent of new taxes on American consumers, one of the largest tax increases in decades, setting a solid foundation for record price inflation once the US economy began to recover; (7) create a new addition to the already bloated Pentagon — the U.S. Space Force — adding about $20+ Billion to an obscene defense budget; or (8) enable the passage of legislation to raise the U.S. debt ceiling from $19.6 Trillion (end of 2016) to $27.8 Trillion (end of 2020).
Despite his inability to claim ownership of the above accomplishments, it seems that Biden has accomplished a great deal of positive actions on his own in just 2 years, with very little fanfare.
It also seems that Mr. Biden constantly is in the gunsights of a well-oiled opposition team, very well-funded by Dark Money.
What puzzles me: What is the endgame for these Dark Money folks?
Is it a return to Feudalism? Or maybe, replication of the Putin model of controlled oligarchy? If that, then will Putin control the final model, or will it be someone else?
The virtual elimination of a reliable, well-supported and highly ethical Fourth Estate in the U.S. has been a major strategic victory by the Dark Money folks in this apparent war against successful continuation of the great American Experiment.
Just curious (and asking for a friend): Is that Biden’s fault, too?
Another Perspective on Inflation
November 11, 2022
Shall we blame Joe Biden?
A recent broadcast (11/10/22) on National Public Radio focused on data compiled by OpenSecrets, a nonpartisan, nonprofit research group that tracks money in politics. They determined that the 2022 election was the most expensive midterm election ever.
They estimated that candidates and political action committees spent nearly $17 Billion on state and federal campaigns https://www.opensecrets.org/news/2022/11/total-cost-of-2022-state-and-federal-elections-projected-to-exceed-16-7-billion/
One key reason they cite is the 2010 Citizens United decision by the Supreme Court which reversed century-old campaign finance restrictions and enabled corporations and other outside groups to spend unlimited funds to influence election outcomes, at the federal, state and local level.
Although political spending likely is just a tiny component of inflation, please stop for a minute to think about how unlimited spending on political issues could be a major contributor to inflation.
Two of the biggest spenders in the 2022 election were men who rose to Billionaire status because of Crypto and the tech sector: Sam Bankman-Fried (FTX) spent $38 Million, and Larry Ellison (Oracle) spent $ 31 Million.Hard left, hard right: It really doesn’t matter. The concept of ‘one man, one vote’ is completely at odds with ‘one man, big checkbook’.
Add to that the mystery and magic of speculative, irrational and unrealistic economic bubbles such as (a) Dot-com (2000); (b) Great Recession (2007) {which ended in June 2009, followed by 128 months of economic expansion}; (c) Tax Cuts and Jobs Act (2017); which was then followed by the COVID-19 Pandemic.
Both Sam and Larry became crazy rich as a result of irrational exuberance. The money they injected into U.S. political campaigns wasn’t ‘real money’ — it wasn’t money they earned honestly through hard work – whether physical or intellectual, or both. They fooled some of the people long enough to score a major win, no different from a Lottery winner.
Then, each of them used some of their Lottery winnings to create an artificial and unsustainable injection into the U.S. political arena.
Here we have a real and irrefutable example of why the Citizens United decision is in direct opposition to the essence of our Democratic Republic.
When it is convenient, some members of SCOTUS revert to the concept of “Originalism” to help solidify their decisions. The Citizens United decision has absolutely zero connection to Originalism; the founding fathers; or any other precedent I’ve been able to find.The Tillman Act (1907) explicitly prohibited corporations and national banks from contributing money to federal campaigns for very good reasons. What has changed since then, I wonder?
Here is an interesting timeline on the evolution of our political contribution system which helps tell the story on how bad characters can be empowered by dark money and create unintended consequences which have huge negative impacts on ‘the rest of us’…..
Senator Sinema and Carried Interest
August 17, 2022
Political Malfeasance in Action
I grew up in the 1960’s in Buffalo, NY where it seemed that candidates for election to public office couldn’t get nominated until they could prove their ability to attract illegal political contributions. Over my professional career, I spent significant time in other northeast states, counties and cities where political corruption was often the norm.
Most of the corrupt elected officials I observed were guilty of getting their driveway paved; their house painted; maybe a new roof. Not good, not appropriate, and certainly, not acceptable.
The recent behavior of Sen. Kyrsten Sinema (D-AZ) relative to the Carried Interest federal tax loophole puts the actions and behaviors of these historic elected officials in NY and CT into the category of ‘fixing parking tickets’.
The despicable and nefarious posturing by Sen. Sinema has blessed Carried Interest, sometimes known as ‘the cockroach of tax breaks’, allowing it to survive another potential assault by Congress.
The proposal to increase the holding period requirement to qualify certain income paid to investment bankers for the lower Carried Interest tax rate was removed from the landmark ‘Inflation Reduction Act’ of 2022 (H.R. 5376) recently passed by both the Senate and the House and signed into law by President Joe Biden on August 16, 2022.
The “compromise” to remove Carried Interest was demanded by Sen. Kyrsten Sinema (D-AZ) which she justified on a complex and convoluted set of criteria, and which potentially might be related to the $1 Million in campaign contributions she received over the past year from private equity professionals, hedge fund managers and venture capitalists whose taxes would have increased exponentially under the original plan.
The concept of Carried Interest dates back to the 16th century, when ocean-going ship captains would often take a 20 percent “interest” of whatever profits were realized from the cargos they carried. This approach is logical and defensible on the risks to life, property and personal capital undertaken by ship captains.
In 21st century America, the meaning of Carried Interest has evolved to describe a tax loophole — an income tax avoidance scheme — which allows some private equity and hedge fund investment bankers to classify large amounts of their compensation related to performing services (i.e. managing and/or investing other people’s money) as investment gains, which substantially lowers the amount they are required to pay in taxes.
Today’s Carried Interestis essentially a payment (bonus or commission) for investment services that is taken out of the profits of the money managed for investors. Private equity firms use pooled money from large institutional investors (pension funds, college endowments, ultra-high net worth individuals, etc.) to acquire controlling interests in struggling, underperforming or undervalued companies. When the investment are made, these acquired entities agree to pay the private equity firms Carried Interestout of the investment profits on top of management and other fees.
Under our current tax law, when the carried interest income is paid out of the private equity firm to individual partners, directors, etc. it is taxed at the preferential (‘capital gains’) rates granted to investment income, even though the income represents compensation for services. In all other contexts, compensation income – salaries, bonus, commissions, etc. – is taxed everywhere else as ordinary income.
Investment professionals often are required to contribute capital if they are eligible to receive carry, although it varies by firm and by position in the hierarchy (from 23% of associates/senior associates to 71% of managing partners). Essentially, the Carried Interest tax loophole acts as a magic wand to turn ordinary compensation income into preferentially-taxed capital gains income for a few thousand specially entitled individuals each year.
Private Equity (“PE”) is a $4.5 Trillion industry which tends to follow a predictable model: Use very high levels of debt to take control of underperforming (or undervalued) companies and then extract as much value as possible over a short- to intermediate time frame.
One of my favorite movies, “Other People’s Money” (1991: Warner Brothers [directed by Norman Jewison]; starring Danny DeVito and Gregory Peck) almost perfectly illustrates the potentially powerful impact of leveraged debt strategically deployed against a weak management team. In the film, the end result is: (a) closure and liquidation of New England Wire & Cable Company, a boring multi-generational family manufacturing business; (b) the loss of hundreds of decent jobs in a small American city; and (c) millions of dollars of ‘pirated booty’ transferred to anonymous private equity investors, with a mighty fine Carried Interest reward paid to Danny DeVito (the investment banker).
Zero value added to the overall U.S. economy.
Devastating value lost to a small American city, its residents and the regional economy.
Sure, the investment banker (Danny DeVito) took home a fine bonus. He probably was able to buy a nice airplane and maybe a vacation home in the Hamptons.
Meanwhile, the wire and cable products formerly supplied by the now defunct domestic company now are being sourced from a foreign firm. The American city where the former Wire and Cable business was located lost tax revenue which had formerly been used to support local schools and public works. And, local families abruptly lost their incomes, and their homes potentially went into foreclosure.
Most alarming: U.S. taxpayers subsidized the whole mess because of this crazy, foolish and irrational tax break known as Carried Interest.
Some will say that the movie, “Other People’s Money” is a 1991 dinosaur which has no relevance in 2022.
Yet, the devastation continues. In our current environment, retailers are particularly vulnerable to leveraged buyouts, and they provide the most visible examples of companies which have been acquired, pillaged and wrecked by private equity firms.
In January 2020, the New York grocery chain Fairway filed for its second bankruptcy in less than four years and announced plans to sell off its stores, due to several efforts by PE firms to extract value from the franchise. The Fairway failure joins a long list of casualties that includes: Sears; Toys R Us; Payless ShoeSource; and Sports Authority, among many others.
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In theory, PE firms snap up underperforming companies using ‘patient capital’; they bring in professional managers to revamp current operations; and then sell the companies through a Public Offering to generate a healthy return.
In practice, the PE industry revolves around deals known as leveraged buyouts, where the PE investors put up a small amount of their own money to purchase a company and borrow the rest. The acquired business becomes responsible for repaying the debt, which puts an immediate strain on cash flows.
In their quest to generate cash and improve operational efficiency, PE firms often: lay off workers, and cut pay and benefits to remaining workers; they sell off owned real estate and lease back; they sell trademarks and other ‘off balance sheet assets’.
PE firms sometimes extract cash using “dividend recapitalizations” where they use the acquired company to borrow additional money which is then used to pay investors. Beyond that, they often charge the businesses they acquire millions in ‘management fees’.
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Shifting the treatment of so-called Carried Interest income from capital gains to ordinary compensation income could raise between $1.4 Billion and $18 Billion annually from income tax on a very small number of investment bankers.
Most informed Americans refer to the lower tax rate on Carried Interest as a loophole that allows already wealthy private equity, hedge fund and other investment managers to pay a lower tax rate than the majority of their employees and other American workers. Once they are fully informed, a significant majority of voters across the political spectrum support legislation that would close this loophole.
“It’s a real rich benefit for the wealthiest of Americans,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “Why should a private-equity manager be able to structure his or her compensation with low-taxed gains? That seems wrong.”
Sen. Sinema was elected to the U.S. Senate by voters in Arizona to represent their interests. It’s hard to see how continuing this awful Carried Interest loophole is in the best interest of anyone in Arizona, other than to Sen Sinema herself because it seems to provide a rich and reliable source of political contributions to help ensure her continued reelection.
And that also seems wrong.
Remember the 2020 Recession?
August 11, 2022
I don’t either.
Just because you and I don’t remember the 2020 Recession, that doesn’t mean it didn’t happen.
The official arbiter of recessions — the Bureau of Economic Research — says there was one.
When Donald Trump took office in January 2017, he inherited an economy in its 91st month of economic expansion following the end of the Great Recession in June 2009. That expansion continued into 2020, becoming the longest on record, peaking at 128 months in February 2020.
The National Bureau of Economic Research officially recognized the Recession of 2020 as the shortest on record at just 2 months, with the trough of that recession occurring in April 2020.
One milestone which helps to mark the 2020 recession is the price of oil. During the month of April 2020, the price of a barrel of West Texas Intermediate was absolutely erratic, actually closing Negative at (Minus $37/bbl) on April 20, 2020. [Was gasoline free that day? I don’t recall.]
Back to January 20, 2017, Trump’s Presidential Inauguration Day.
Paul Ryan, a Republican from Wisconsin, was serving as Speaker of the House. Mitch McConnell, a Republican from Kentucky, was the Senate Majority leader.
Ryan was first elected to the House in 1998 at age 28. He developed a reputation as a no-nonsense deficit-hawk fully focused on reducing entitlements and reducing taxes. Ryan had been serving as Speaker of the House since 2015.
The 2017 Tax Cuts and Jobs Act (TCJA) was Paul Ryan’s swan song, eagerly supported by Trump and most congressional Republicans.
Unfortunately, it was exactly the wrong time to enact this complex piece of legislation, primarily because it relied on untested assumptions at a point in time when the U.S. was riding the tail end of the longest economic expansion in history. It created massive increases in our national debt; it favored investment increases in oil and related industries (which to some appeared to be a means to curtail pending increases in oil prices); and exuberant expectations that repatriation of corporate profits parked offshore would be used to create domestic jobs turned into a massive stock buyback across the market.
In early February 2018, Paul Ryan began to reflect on the true consequences of the TCJA. He tweeted, “Julia Ketchum, a secretary at a public high school in Lancaster, Pennsylvania, said she was pleasantly surprised her pay went up $1.50 a week. She didn’t think her pay would go up at all, let alone this soon. That adds up to $78 a year, which she said will more than cover her Costco membership for the year.”
In April 2018, Ryan announced his intention to retire from Congress on January 3, 2019 — the end of his current term — thus ending a 20-year career representing his constituents in Wisconsin — so that he could spend more time with his family.
Left to its own devices, the 2017 TCJA may have created an unchecked economic calamity.
Then came the Covid-19 Pandemic which turned into an unforeseen international societal and economic tragedy – and clearly was the trigger which caused the 2020 recession. Yet, the impacts of Covid didn’t begin to surface until 1st quarter 2020, so there is a 24 month period following the January 2018 introduction of the TCJA which economists are now examining to help create real context around current (mid-2022) economic uncertainties.
Even a neophyte like me can add the 2022 Russian invasion of Ukraine to: (a) the long-term economic damage created by the TCJA; (b) the Covid wild card; and (c) the economic devastation of Trump’s tariffs, particularly on our agriculture sector. When we spread the numbers, we can begin to see an almost perfect recipe created under Trump’s watch sufficient to decimate any economy.
Despite the open hostility and recalcitrance of elected Republicans currently serving in Congress, I must give Joe Biden and the Democrats a 5-Star rating for refusing to capitulate, and for keeping the ball moving forward.
An Unlikely Duo: A 21st Century Odd Couple
June 9, 2022
Chair of the Select Committee Rep. Bennie Thompson (D, MS) & Co-Chair Rep. Liz Cheney (R, NV).
Today is June 9, 2022, the first day of a series of public hearings convened by the House Select Committee to Investigate the January 6th Attack on the U.S. Capitol, Chaired by Thompson, with Co-chair Cheney.
They are an Unlikely Duo, truly polar opposites in most ways, yet bound together by at least one common thread: an oath of office where they individually affirmed a solemn promise to “support and defend the Constitution of the United States against all enemies, foreign and domestic…”.
Thompson began his service as a Member of Congress in 1993 representing the 2nd Congressional district of Mississippi. He is a black male; currently age 74; born, raised and still a resident of Bolton, MS: a small, rural and hard-scrabble town in Hinds County, approximately 20 miles from Jackson, the state capital.
Thompson’s voting record has been solidly ’liberal’. His legislative platform is and has been focused mainly on agriculture and rural issues; civil rights; homeland security; equal education; and health care reform. He is a founding member of the Congressional Progressive Caucus.
Cheney began her service as a Member of Congress in 2017, representing the Wyoming at-large Congressional district. She is a white female; a lawyer; age 55; 3rd generation Wyoming resident on her mother’s side. Her father, former U.S. VP Dick Cheney, represented WY in Congress for 10 years.
Cheney is known as an “ideological conservative”, and a solid representative of the Republican establishment, noted for her focus on national security; support for the U.S. military; a pro-business stance; hawkish foreign policy views; and fiscal and social conservatism.
Prior to her ‘fall from grace’ for refusing to capitulate to the “stolen election theory”, Cheney chaired the House Republican Conference, the third-highest position in the House Republican leadership.
It seems perfectly clear from watching and listening to this first public hearing jointly moderated by this Unlikely Duo that the January 6th Insurrection is a seditious conspiracy against the Constitution of the United States.
It seems entirely plausible that House Republican leader Kevin McCarthy and Senate Republican leader Mitch McConnell have continued to advance and support blatant political lies — fully disproved by both facts and the courts —aimed to support what has come to be known as the “Big Lie”: an imaginary alternative outcome from the 2020 presidential election.
Are Kevin and Mitch potentially guilty of Sedition themselves, or merely complicit in their disruptive and subversive actions?
Most sad: Rod Serling could have produced an entire season of The Twilight Zone off the McCarthy/McConnell fabrications.
Flailing at the branches, or striking at the root?
May 25, 2022
Dozens of polls and studies reveal general agreement among American adults which favors sensible gun control reform legislation, incorporating a variety of strategies such as: (a) increased funding for mental health services; (b) universal background checks; (c) a national ‘red flag’ law; (d) training and/or licensing requirements; (e) more consistent rules across state lines.
Each and all of these would likely contribute toward reducing senseless gun violence. Yet, the Root Cause of our present dilemma seems to center around one specific type of firearm, often called “AR-15 style”.
These are high-capacity military-style weapons which can be fired semi-automatically and/or have the capability of being easily transformed into a rapid fire weapon. There is no legitimate purpose for these weapons in a civil society, and the ultimate goal to remove this Root Cause from the equation ought to be a total and complete ban on the civilian purchase, sale or possession of such weapons.
The next critical variable is ammunition. There is no logical or defensible reason to support civilian sale, possession or use of military grade ammunition categorized as: hollow point; full metal jacket; armor piercing; green tip; black tip; or any other sort of ammo which is not used by regular gun owners for target shooting or which is appropriate for legitimate hunting purposes.
As painful as it might seem to Wayne LaPierre, Jason Ouimet and others at the NRA, these AR-15 style weapons and military grade ammunition seem to continually and disproportionally fall into the hands of a few people who have really bad agendas.
If we eliminate the very weapons and ammunition which seem to attract the interest of folks with bad agendas, we will be making some real progress.
Please listen carefully, NRA.
The great majority of us don’t want to take guns away from our neighbors; we don’t harbor animosity toward responsible gun owners; and we often are gun owners and NRA members ourselves.
We do believe there is a balance – a sensible equilibrium — which respects, supports and honors the American tradition for people to keep and bear arms in a manner consistent with a civilized 21st century society.
Let’s work together to find that balance.
Information, Communication and Twitter
April 27, 2022
When I was growing up in Buffalo, we learned about current events from regulated media sources, including radio and television broadcasts. These entities were regulated by the Federal Communications Commission (FCC), an entity which was created by the federal Communications Act of 1934 which combined and organized federal regulation of telephone, telegraph, and radio communications.
One of the critical purposes of the Communications Act pertained to national security, law enforcement, and intelligence activities.
In my household, we also subscribed to morning and evening print newspapers which were privately owned, independently distributed by subscription only, yet still subject to some limited oversight and regulation by the FCC.
The Telecommunications Act of 1966 updated much of the Communications Act of 1934 to encompass technology changes to include broadcast television and cable stations which had not been subject to laws governing the public airwaves.
Today, the FCC regulates interstate and international communications by radio, television, wire, satellite and cable in all 50 states, the District of Columbia and U.S. territories.
The FCC is an independent U.S. government agency overseen by Congress which serves as the primary authority for U.S. communications law, regulation and technological innovation, and it continues to serve as a primary resource for national security, law enforcement, and intelligence activities.
No one could argue that technology has evolved exponentially since 1966, with digital technology transforming the business of news, including profound implications for information dissemination, publishing and operations.
The most dramatic impacts on operating models have been in production and distribution, transforming from a single product to a multi-products array of channels and formats, such as:
- Desktop, tablet, mobile and watch sites/apps;
- Channels, including on-platform owned products; and off-platform (email, Facebook, text); and
- Third party, off-platform (Snapchat, Apple news, Yahoo) formats: Video, interactive graphics, messaging, podcasts, and many more.
This shift in distribution flows through to production, including the shift from a process geared around the “daily miracle” of a print newspaper to a 24/7 digital news cycle and the use of data & analytics to assess performance and make decisions on both content and delivery.
How can it be that the FCC has been unable to adapt to these rapidly evolving technology changes? The FCC failed us by not identifying, encompassing and including new and emerging means of mass communication delivered on the internet, including such social media platforms as Facebook, YouTube, LinkedIn and Twitter.
Virtually all of the dangers the FCC was intended to protect us from have been incubated and nurtured on the internet, including: (a) promotion and amplification of conspiracy theories; (b) empowerment of fringe groups; (c) foreign influences into American politics; (d) infusion of false narratives into current events; and (f) cyber-attacks on electric-grid and other crucial infrastructure which have been confirmed in the US, the Middle East, Germany, Ukraine and Azerbaijan.
Our national well-being depends not just on our confidence in our government but also on the integrity and reliability of private companies through which we lead our digital lives.
Recently, hundreds of armed, self-proclaimed militiamen converged on Gettysburg after a single Facebook page promoted the fake story that Antifa protesters planned to burn American flags there. Prior to the 2020 Presidential election, e-mails and videos which eventually were attributed to the Iranian government were sent to voters in Arizona, Florida, and Alaska, purporting to be from the Proud Boys urging recipients to “Vote for Trump or we will come after you.”
A physical wall along our southern border with Mexico is a great soundbite, but the 21st Century threats to our national security have little to do with migration of aggrieved and oppressed people who are clawing for survival and self-sufficiency.
The real threats to our national security are from conspiracy theorists; fringe groups; foreign influencers; religious extremists; the infusion of false narratives into current events; and cyber-attacks on infrastructure similar to those which have been confirmed in the US, the Middle East, Germany, Ukraine and Azerbaijan.
Our Congress needs to shift its primary priorities toward critical strategic issues (i.e. regulatory oversight of national security issues), and to put less critical – but still important – issues into a secondary status.
Twitter currently has almost 400 Million users, about half of whom use the platform on a daily basis.
The announcement that Elon Musk will acquire Twitter is a wakeup call to our Congress.
This is no reflection on Elon Musk: No doubt his intentions are honest and pure. But: What if the next entity which steps in to acquire a virtually independent and unregulated key strategic asset in our emerging 21st century communications infrastructure is a foreign entity, perhaps a foreign oligarch?
When will our elected officials draw a line between focusing on false narratives and trivia, and focusing in on critical national security issues?
“The legacy of Mitch McConnell’s obdurate and unwavering positions will haunt us for many decades.”
U.S. District Judge Kathryn Kimball Mizelle struck down the federal mask mandate for airplanes and other modes of public transportation on April 18, 2022, writing that the Centers for Disease Control and Prevention had exceeded its authority and failed to follow proper rulemaking procedures.
Her decision led to U.S. airlines and other transportation hubs to promptly drop their mask mandates.
Judge Mizelle sits on the Federal District Court for the Middle District of Florida. She was nominated by former President Donald Trump in September 2020 at age 33, and confirmed by a 49-to-41 Senate vote later that year.
She graduated from the University of Florida Levin College of Law in 2012; worked at the U.S. Department of Justice and in private practice, and served as a law clerk for several federal judges as well as Supreme Court Justice Clarence Thomas. She belongs to the conservative Federalist Society, which advocates for an originalist interpretation of the U.S. Constitution.
Following her nomination as a Federal Judge, the ABA Standing Committee on the Federal Judiciary said that a majority of the group had deemed that Mizelle did “not meet the requisite minimum standard of experience necessary to perform the responsibilities required by the high office of a federal trial judge.”
Despite the ABA’s recommendation to McConnell and the Senate to reject Mizelle’s nomination, the U.S. Senate confirmed her nomination in November 2020 along partisan lines.
walrus51 